Air Canada Rolls Out Business Class Basic Fares, Because Of Course

Air Canada has today announced that it will introduce two new premium fare categories — business class basic and premium economy basic.

Details of Air Canada’s new “basic” premium cabin fares

Air Canada is introducing business class basic and premium economy basic, because “demand for premium travel continues to grow, and this change aligns with our partners and industry trends.” These fare brands will be available in the Caribbean, Latin America, Mexico, South America, and in transatlantic joint venture markets, alongside United and Lufthansa Group. Here are the key details:

When it comes to points and SQC qualifying credit, these fares will earn 1x Aeroplan points per dollar spent, and elite status members can earn between 2x and 6x Aeroplan points, depending on their status at the time of travel. The fares will accumulate SQC at a rate of 4x SQC per dollar, aligned to other fares in those cabins.

Aeroplan elite status and credit card benefits will still apply, except for eUpgrade, which can’t be used on these fares.

Air Canada makes an interesting claim about basic fares

It’s absolutely not surprising to see these fares roll out. On the most basic level, that’s because Air Canada is in a transatlantic joint venture with United and Lufthansa Group, and we’re seeing those airlines roll out basic fares across the Atlantic. So since these airlines coordinate schedules and fares, it makes sense to have a streamlined offering across carriers.

Frankly, as far as “basic” fares go, these are hardly the most punitive that we’ve seen. You’re primarily just having to pay to assign seats, and you’re probably stuck with higher change fees.

Here’s what I find most interesting, though. The trade bulletin about these changes describes this as “providing more options” and “enabling customers to choose the benefits they value most.” I usually call out those claims, because that’s not typically what’s actually going on.

As I’ve said in the past when airlines roll out basic premium fares, I wouldn’t expect basic business class fares to be materially cheaper than previous standard business class fares. Instead, more often than not, I suspect the previous cheapest fares are just being made the new basic fares, in an effort to get people to buy up to more expensive fares.

After all, the goal is to extract as much revenue from passengers as possible, and to create punitive products that make people want to buy up to a more expensive fare.

Air Canada makes the claim that “Premium Economy Basic and Business Class Basic will be priced below Air Canada’s existing premium fare options, while retaining the premium seat and onboard service.” However, I suspect that’s not quite intended the way I interpret it.

Obviously airfare pricing is dynamic, but is Air Canada really suggesting that we won’t in some cases see the existing cheapest fare become the new basic fare, and then customers will be stuck paying extra to get the same thing they received with their fare before?

If true, it would make Air Canada the first airline I know of where that’s the case, or where such an assurance has been provided.

Bottom line

Air Canada is rolling out basic premium fares, with the introduction of business class basic and premium economy basic. This matches the general industry trend that we’ve seen, whereby “basic” fares are no longer just reserved for economy.

The argument is always that these fares are intended to give consumers more choice, and pay only for the things that they value. However, the real motivation is typically to extract as much revenue from each passenger as possible, and to create punitive fare categories that make people want to buy up to a more expensive fare.

What do you make of Air Canada’s new basic premium fares?